Clubbing of clearances for SSI exemption needs specific pleadings and evidence of dummy unit status before duty demand can stand.

Clubbing of clearances to deny small scale industry exemption requires a specific foundational allegation and supporting evidence that the units are not independent, such as dummy character, mutuality of interest, or financial flow-back. Where the show cause notice does not plead that basis and the adjudication travels beyond the notice, clubbing cannot be sustained. Here, the units were in separate premises with separate registrations, and no evidence established financial flow-back, power of attorney, or other material to treat the sister concern as a dummy unit. The clearances therefore could not be clubbed, the exemption limit was not crossed, and the duty demand and penalty were unsustainable.

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Issues: Whether the clearances of the appellant and the sister concern could be clubbed for denying small scale industry exemption and sustaining the duty demand and penalty.

Analysis: Clubbing of clearances requires a valid foundational allegation and supporting material showing that the units are not truly independent, such as dummy character, mutuality of interest, or financial flow-back. The show cause notice did not specifically set out any such basis, and the findings recorded in the impugned order travelled beyond the notice. The units were found to be in separate premises with separate registrations, and there was no established evidence of financial flow-back, power of attorney, or other material to justify treating the wife's unit as a dummy of the appellant.

Conclusion: The clearances could not be clubbed, the exemption limit was not crossed, and the duty demand and penalty were unsustainable.

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